Euro and pound falls to one-month low as Grexit looms large while Australian dollar hits 6-year low

Euro and other major currencies have fallen sharply against the dollar amid reports that 16 of 18 Eurozone members have favoured letting Greece leave the currency region.

With the efforts of Greek Prime Minister Alexis Tsipras to reach a deal in Brussels on Tuesday (7 July), the currencies that had been supported by the optimism of some solution to the crisis finally lost ground.

EUR/USD plunged to 1.0920, its lowest since 2 June, from 1.1023 upon the news, making a 0.7% loss on the day.

The pound too fell to a 1-month low against the dollar with the latter rising broadly with continuous negative reports from Greece. GBP/USD fell to 1.5422 from near 1.5600 on fresh news from Europe.

Sterling is only 1.2% down so far in July, which is less significant given the sharp bounce back from the 5-year low of 1.4560 hit in April.

The Aussie dollar has fallen to a new 6-year low on Tuesday amid the worsening Greek scenario. The Australian currency dropped 0.8% on the day to 0.7425, its lowest since June 2009.

The Australian central bank had left its benchmark interest rate unchanged at 2% at the policy review earlier in the day and said it wanted the currency weaker for better economic prospects.

"The Australian dollar has declined noticeably against a rising US dollar over the past year, though less so against a basket of currencies. Further depreciation seems both likely and necessary, particularly given the significant declines in key commodity prices," Glenn Stevens, governor of the Reserve Bank of Australia said.